21st Century Fox international ad revenue up 21% led by STAR broadcast of the IPL
The company's annual revenue was at $30.40 billion in 2018, 7% up from prior year
On Wednesday, Twenty-First Century Fox, Inc. (“21st Century Fox” or the “Company” -- NASDAQ: FOXA, FOX) reported financial results for the three months and full year ended June 30, 2018.
The company reported total annual revenues of $30.40 billion, an increase of $1.90 billion, or 7%, from the $28.50 billion of revenues reported in the prior year.
The company reported total quarterly revenues of $7.94 billion, a $1.19 billion, or 18%, increase from the $6.75 billion of revenues reported in the prior year quarter. This revenue growth reflects strong double-digit growth across all operating segments led by higher content revenues at the Filmed Entertainment segment and higher affiliate and advertising revenues at the Cable Network Programming and Television segments.International affiliate revenue increased 12% driven by strong double-digit growth at both Fox Network Group International (FNGI) channels and STAR. International advertising revenue increased 21% led by STAR, due to the impact of the inaugural broadcast of the IPL and entertainment growth, combined with continued growth at FNGI.
Commenting on the results, Executive Chairmen, Rupert and Lachlan Murdoch jointly said: “Our strategic plan over the last decade has been built on a singular focus on creative excellence to power our world-class video brands. The outstanding shareholder value created this year through our proposed transactions recognizes the work we have done to position our businesses to succeed during a time of great change. We continued to make progress this past fiscal year. We delivered financial and operational momentum, including four consecutive quarters of double-digit domestic affiliate gains, one of the strongest six-month periods ever for our film studio, and continued dominance in live sports and news. We start a new fiscal year with tailwinds from last quarter’s double-digit topline growth across our business segments. As we move closer to combining our businesses with Disney and establishing new “Fox”, we are convinced that the paths we are creating for our iconic businesses will drive enduring and growing value for our shareholders.”
The results come as Fox looks to close a $71 billion sale of entertainment assets to Walt Disney Co., which has agreed to purchase assets including Fox's film and television studios, Star India and European pay-TV giant Sky PLC. Disney, which initially agreed to buy the Fox assets in December, raised its offer following a bidding war with Comcast Corp.
The Rupert Murdoch controlled company is now locked in a bidding war with Comcast over the 61 percent of Sky it does not currently own.
According to reports, on Tuesday, Fox formally submitted its 14 pounds a share offer to buy the pay TV operator. That bid is still below Comcast's 14.75 pounds a share offer for Sky. Fox now has until September 22, 2018 to submit a revised offer.
Annual and Quarter Highlights:
- STAR India (“STAR”) secured Indian Premier League’s (”IPL”) Global Media and Digital broadcast rights and, aided by the inaugural broadcast of the IPL, further penetration of its Hotstar platform and continued general entertainment growth, nearly doubled its profit contributions year over year.
- Quarterly income from continuing operations before income tax expense of $1.08 billion increased $266 million from the $815 million reported in the prior year quarter. Quarterly total segment OIBDA of $1.91 billion increased 32% from the $1.45 billion reported in the prior year quarter led by higher contributions from the Filmed Entertainment and Cable Network Programming segments.
- 20th Century Fox’s films led the industry in awards season, both in nominations and wins, earning six Academy Awards, including Best Picture for The Shape of Water, and seven Golden Globe Awards, following 27 nominations in both instances, the most of any studio and ended the year with the strong theatrical success of Deadpool 2, which has grossed over $730 million in worldwide box office to date.
- The Company successfully negotiated and acquired key domestic sports rights, including National Football League (“NFL”)’s Thursday Night Football and WWE’s SmackDown Live for Fox Sports.
Update on acquisition by Disney and Creation of New “Fox”:
On June 20, 2018, the Company entered into an amended and restated merger agreement (the “Disney Merger Agreement”) with The Walt Disney Company (NYSE: DIS) pursuant to which Disney has agreed to acquire, for a price of $38 per Company share, the Company, including the Twentieth Century Fox Film and Television studios and certain cable and international television businesses. Prior to the acquisition by Disney, the Company will separate the Fox Broadcasting Company, Fox Television Stations, Fox News Channel, Fox Business Network, FS1, FS2, Big Ten Network and certain other assets and liabilities into a newly formed subsidiary (“New Fox”) and distribute all of the issued and outstanding common stock of New Fox to the Company’s stockholders on a pro rata basis. The closing of the transactions contemplated by the Disney Merger Agreement are subject to the satisfaction of certain conditions, including, among others, regulatory approvals and the receipt of certain tax opinions with respect to the treatment of the transaction under U.S. and Australian tax laws. On June 27, 2018, the Antitrust Division of the United States Department of Justice cleared the pending acquisition of the Company by Disney. On July 27, 2018 at a special meeting of the Company’s stockholders, the Company’s stockholders approved the Disney Merger Agreement and approved the other proposals voted on at the special meeting.
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